Yoma has breached its two-year downtrend line with volume expansion (2 Jun 24)

June 2, 2024 el15

Dear all,

Among the numerous write-ups which I regularly sent to my clients; I have previously done a short write-up on Yoma Strategic Holdings Ltd on 23 Apr 2024. It traded between $0.040 – 0.042 on 23 Apr and closed at $0.041. A multi-year low (at least 13 years low) price was reached on 19 Apr and 22 Apr. I have actually informed some active clients who trade small cap stocks to take a look on 19 Apr.

Since 23 Apr, Yoma has seen stellar performance in its share price by rising 137% from $0.041 to touch an intra-day high of $0.097 on 30 May in a span of five plus weeks! Yoma closed at $0.085 on 31 May.

In my 23 Apr write-up, I mentioned that Yoma’s results seem to be improving and it may have a turnaround angle.

Let’s take a look at its latest set of results released on 29 May.

Highlights of its FY24 results

a) Revenue growth soared 79% y/y

FY24 revenue jumped 79% y/y from US$124m in FY23 to US$221m in FY24. This significant jump in revenue was led by Yoma Land (+97% y/y) and F&B (+30% y/y) with additional growth in Leasing (+71%). Consolidation of Wave Money contributed US$52m in FY24 revenue.

b) Core EBITDA jumped 160% y/y

All business segments saw an improvement in underlying performance supported by improved margins. Yoma’s core EBITDA soared 160% y/y from US$18m in FY23 to US$46m in FY24.

c) Turnaround in profitability

Yoma’s net profit attributable to equity holders reversed from a loss of US$41m in FY23 to a profit US$18m in FY24. This was driven by an improvement in core EBITDA and the net fair value gain on investment properties.

d) Further deleveraging & completed THB bond refinancing

Yoma’s net gearing declined from 18.6% in FY23 to 15.5% in FY24. As net gearing drops, it is likely that interest expenses may also reduce in tandem.

Moreover, Yoma has completed its THB bond refinancing by issuing THB1.7b guaranteed bond issuance on 22 Nov 2023. These are fixed rate bonds with maturity profiles of three and five years.

e) Unrecognised revenue of US$147m to be recognised over the next 18 – 24 months

Yoma Land’s backlog currently stands at US$147m in unrecognised revenue from ongoing projects in StarCity, Pun Hlaing Estate and City Loft West, providing visibility into the Group’s financial performance over the next 18 to 24 months.

Chart outlook

Based on Chart 1 below, Yoma has staged a bullish upside break above its two-year downtrend line with volume expansion. Given that it has staged such a strong rally, indicators are overbought at the moment. Furthermore, the candle with a long upper shadow formed on 30 May may indicate that bulls do not have enough conviction to continue to push it higher in the very near term.

Strong support is likely to be seen around $0.069 – 0.070 (50% Fibonacci retracement) in the event of a pullback. Notwithstanding the above, most moving averages are turning upwards which is a positive sign over the medium term.

Near term supports: $0.079 – 0.080 / 0.074 – 0.076 / 0.069 – 0.070

Near term resistances: $0.088 – 0.090 / 0.097 – 0.100 / 0.105 – 0.108

Notwithstanding the above, I wish to add that chart reading is subjective and may be less accurate for small cap stocks.

Chart 1: Yoma has breached its two-year downtrend line with volume expansion

Source: InvestingNote 31 May 24

Brief write-up, more to come after my site visit

For Yoma, examples of some apparent investment risks are political risk, uncertain business operating environment and exchange rate risk are some of the risks to contend with.

This is a brief write-up. I will do a more in-depth write-up after my site visit to Yoma this month.

STAY TUNED!

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